Correlation Between NewFlex Technology and Hurum
Can any of the company-specific risk be diversified away by investing in both NewFlex Technology and Hurum at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining NewFlex Technology and Hurum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewFlex Technology Co and Hurum Co, you can compare the effects of market volatilities on NewFlex Technology and Hurum and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in NewFlex Technology with a short position of Hurum. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewFlex Technology and Hurum.
Diversification Opportunities for NewFlex Technology and Hurum
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NewFlex and Hurum is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding NewFlex Technology Co and Hurum Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hurum and NewFlex Technology is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on NewFlex Technology Co are associated (or correlated) with Hurum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hurum has no effect on the direction of NewFlex Technology i.e., NewFlex Technology and Hurum go up and down completely randomly.
Pair Corralation between NewFlex Technology and Hurum
Assuming the 90 days trading horizon NewFlex Technology Co is expected to under-perform the Hurum. In addition to that, NewFlex Technology is 1.12 times more volatile than Hurum Co. It trades about -0.21 of its total potential returns per unit of risk. Hurum Co is currently generating about -0.23 per unit of volatility. If you would invest 78,900 in Hurum Co on September 1, 2024 and sell it today you would lose (8,400) from holding Hurum Co or give up 10.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewFlex Technology Co vs. Hurum Co
Performance |
| Timeline |
| NewFlex Technology |
| Hurum |
NewFlex Technology and Hurum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewFlex Technology and Hurum
The main advantage of trading using opposite NewFlex Technology and Hurum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewFlex Technology position performs unexpectedly, Hurum can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Hurum will offset losses from the drop in Hurum's long position.| NewFlex Technology vs. Dongsin Engineering Construction | NewFlex Technology vs. Doosan Fuel Cell | NewFlex Technology vs. Daishin Balance 1 | NewFlex Technology vs. Total Soft Bank |
| Hurum vs. Cube Entertainment | Hurum vs. Koh Young Technology | Hurum vs. NewFlex Technology Co | Hurum vs. T3 Entertainment Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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